The recent decision of the Ontario Superior Court of Justice in Aldo Group Inc. v. Moneris Solutions Corporation, 2012 ONSC 2581 (CanLII) poses the question:
Can a forum selection clause bind a person who was not a signatory to the contract containing the clause?
In a lengthy judgment, D.M. Brown J. of the Toronto Commercial List Court considered a motion brought by the co-defendant, MasterCard International, Inc. ["Mastercard"] asserting that the claim brought by the plaintiff, Aldo Group Inc. a footwear retailer ["Aldo"] was subject to a forum selection clause specifying the New York courts by reason of the nature of the plaintiff’s claims pleaded against MasterCard, notwithstanding that Aldo was not a privy to either of the two contracts containing the New York forum selection clause.
Like many retail chains, Aldo offers its customers the convenience of making purchases at its stores using credit or debit cards, including MasterCard. In April, 2010, Aldo was alerted by Mastercard that some of its retail outlets were the points of purchase for legitimate transactions made with MasterCards, but which subsequently were used to make fraudulent transactions.
Aldo disputed Mastercard’s investigation which concluded it had failed to comply with certain data security standards mandated by MasterCard, thereby facilitating, or contributing to, the subsequent fraudulent use of some MasterCard credit card data.
MasterCard then decided to “pass the buck”: it imposed a financial assessment for that incident, passed down the contractual chain to Moneris Solutions Corporation, Aldo’s processor which debited Aldo’s account for approximately U.S.$4 million.
Aldo then sued both Moneris and MasterCard seeking to recover the assessment. MasterCard sought a stay of the action pursuant to section 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43, relying on a choice of forum clause in favour of New York State in a contract between it and a bank higher up the processing chain. Aldo was not a party to that contract.
MasterCard’s motion was dismissed. Justice Brown sheds some light on the otherwise byzantine world of credit card banking as follows:
 Conceptually the world of credit cards contains two sides: the card-issuing side of the business and the transaction-processing side. Simply put, a Card Association, such as MasterCard, enters into agreements with financial institutions to issue its credit cards. Those institutions are known as Issuing Banks. On the transaction side, MasterCard contracts with institutions, such as banks, to acquire merchants who will accept MasterCard as a method of payment for goods and services. Those banks are known as Acquiring Banks; they often are one and the same as the Issuing Banks.
 Members, such as BMO and Harris, may not only issue MasterCard credit cards, but they may also acquire payment transactions made with MasterCard branded payment cards. In the present case BMO and Harris acted as Acquiring Members for MasterCard card transactions made between consumers and merchants, such as Aldo. MasterCard’s Standards permit a Member to use a service provider, such as the defendant Moneris, to support the Member’s MasterCard activity provided the service provider agrees to comply with the Standards.
 In this case the Acquiring Members entered into processing agreements with the defendant, Moneris, to support the Members’ MasterCard activity. In the contractual framework governing MasterCard transactions Moneris is not classified as a Member of MasterCard, rather it is a third party processor, or Member Service Provider. Moneris is based in Toronto, Ontario.
 Finally, Moneris contracted with Aldo, a retailer of footwear, with a substantial presence in Ontario. Aldo’s head office is located in Montreal, Quebec. In Canada Aldo’s largest retail presence is in Ontario with approximately 150 retail outlets. There are about 51 Aldo retail stores in New York State.
 Aldo and Moneris entered into a Moneris MasterCard National Account Merchant Agreement made January 1, 2008 (the “Processing Agreement”). Moneris entered into the agreement with Aldo for itself and on behalf of BMO; MasterCard was not a party to that agreement. Schedule A to the Processing Agreement is a detailed statement of conditions governing the processing relationship between Moneris and Aldo (the “Moneris Terms and Conditions”), including the method for processing customer transactions and seeking reimbursement from the Bank for the transactions.
Are you with me so far?
The upshot of the decision is that since Mastercard conceded jurisdiction simpliciter, the remaining issue was which forum selection clause, if any, governed the dispute: the Mastercard agreements between the merchant banks and the agreement with Moneris which stipulated New York, or the forum selection clause between Moneris and Bank of Montreal which stipulated Ontario. In either case, Aldo was not a privy to the inter-connected contracts within the credit card processing chain.
After reviewing the Statement of Claim and observing that Mastercard had yet to file a defence, Brown J. held:
 Stepping back, on the face of its pleading Aldo has asserted a claim in contract against its privy, Moneris, and also seeks declaratory relief in respect of Moneris’s conduct and certain provisions of the Processing Agreement. In addition, Aldo seeks a declaration that Moneris was not entitled to apply the 2010 Security Rules to the Intrusion. Those claims necessarily will require a consideration of the facts surrounding the imposition and collection of the Assessments, including whether the Intrusion constituted an ADC Event. Since the basis of Aldo’s claim against Moneris is the unlawfulness of the Assessments imposed by MasterCard, then MasterCard is a necessary and proper party to a proceeding properly brought against another person served in Ontario. As well, MasterCard is a necessary party by reason of Aldo’s claim that Moneris and MasterCard conspired to inflict economic harm on it.
 Drawing on the same events Aldo asserts several direct claims against MasterCard – tort, unjust enrichment and declaratory relief. I do not read those pleas as artful devices to circumvent a forum selection clause. They are causes of action sometimes asserted by a plaintiff who is a stranger to a contract between others. Moreover, Aldo was not a privy to any contract containing the New York Forum Clause, so there was no clause to which it had contracted that it had to circumvent.
 Aldo’s plea involving subrogation clearly is an alternative plea, not a primary one. As noted, I do not read the Claim as asserting, at this point of time, any subrogated claim by Aldo against MasterCard. The prayer for relief seeks a declaration that Aldo is subrogated to rights of Moneris and the Banks and is entitled to assert “causes of action” which they may have against MasterCard. This alternative plea appears to seek a declaration that Aldo can assert contractual subrogated claims at some later point against MasterCard. Whether Aldo’s Processing Agreement with Moneris and the Bank would support a finding that Aldo enjoyed rights of subrogation against MasterCard is an issue put in play by the Claim.
 In sum, I do not read Aldo’s Claim as reducing itself to claims by a subrogee against MasterCard. Quite the contrary. Aldo’s primary claims against MasterCard are made by it as a stranger to the License Agreement and TPP Agreement. Whether those claims as a stranger are tenable at law or on the facts is a matter for adjudication on the merits. I think it clear that Aldo has cast itself as a stranger to contracts to which MasterCard is privy and advances its direct claims against MasterCard on that basis.
 Aldo only seeks a declaration that it is a subrogee in the event it fails against Moneris. Of course, if Aldo succeeds at trial on its direct claims against MasterCard, then no practical purpose likely would be served by granting such a declaration. If, on the other hand, Aldo fails in its claims against Moneris and its direct claims against MasterCard, then a declaration that it is a subrogee may be of little assistance to Aldo given the doctrines of issue and cause of action estoppel.
 I therefore conclude that the “essential character” of the claims pleaded by Aldo is not one of equitable subrogation, but they are direct claims advanced by a stranger to the contracts to which MasterCard is privy, although some claims for declaratory relief arguably rest on the incorporation by reference of the Security Rules in the Processing Agreement.
The motion judge then undertakes a comprehensive review of mostly American jurisprudence on forum selection clauses binding non-signatories, which focus on the doctrine of equitable subrogation, successor in interest and “closely held” cases. Justice Brown declines to follow the U.S. approach in enforcing forum selection clauses against non-signatories. Brown J. writes,
 In sum, Aldo was not a signatory to either the License Agreement or TPP Agreement containing the New York Forum Clause. The evidence disclosed that MasterCard exercised significant control over the contractual terms and conditions governing transactions using its cards. For whatever reason, it did not insist that its Acquiring Banks/third-party processors obtain a merchant’s agreement to a New York Forum Clause. Instead, in the present case BMO and Moneris bargained with Aldo for a broadly-worded Ontario forum clause. MasterCard does not argue that the New York Forum Clause is incorporated by reference into that Processing Agreement. Aldo is contractually bound to sue its privy, Moneris, in Ontario. I have found that in its Claim Aldo is not suing MasterCard as a subrogee; its claims are direct ones against MasterCard advanced on the basis that Aldo is a stranger to the agreements between MasterCard and its acquiring bank and third-party processor. On those facts, MasterCard has not demonstrated that Aldo is bound by the Member or Moneris New York Forum Clauses for the claims it is advancing against MasterCard in this action.
 I see no unfairness to MasterCard in this result. Judicial enforcement of forum selections clauses is premised on holding parties to their bargain. I have found that Aldo did not bargain for the New York Forum Clause. Further, as I have noted, MasterCard exerts significant control over the terms on which MasterCard transactions are made; it was open to MasterCard to require Acquiring Banks to include a specific forum selection clause in merchant agreements. Moreover, the MasterCard Rules disclosed that New York is not the universal forum in which to adjudicate disputes with Members. Regional variations exist – see, for example, section 3.4 of the Europe Region Rules. In addition, MasterCard filed no evidence on this motion describing the prejudice or inconvenience it might suffer were Aldo permitted to proceed with its claims in Ontario – MasterCard relied solely on its assertion that Aldo was bound by the New York Forum Clause. Finally, MasterCard carries on business in Ontario, with its regional office located in Toronto.
Having found that Aldo was not bound by the Member or Moneris New York Forum Clauses, the motion judge, citing the recent Supreme Court of Canada decision in Club Resorts Ltd. v. Van Breda, concludes that Mastercard’s failure to advance an argument based on forum non conveniens was fatal to its motion:
 Since MasterCard sought an order that Aldo was not entitled to assert against it the causes of action set out in its Claim in this Court, and since I have found that no forum selection clause prevents Aldo from so doing, the absence of any argument by MasterCard that Ontario is not the convenient forum for this action means there is no basis for this Court to decline jurisdiction over this action against MasterCard.